The Final Budget Outcome (FBO) for the 2013-14 financial year is a budget report card on the previous Government’s irresponsible fiscal and economic management.
Despite Labor initially forecasting a surplus of $5.4 billion for the 2013-14 financial year, and keeping this forecast surplus for eight successive budget updates, today’s FBO confirms a $48.5 billion deficit.
This is more than a $30 billion deterioration in the year since former Treasurer Wayne Swan delivered his final Budget.
This FBO confirms Labor delivered six successive deficits totalling $240 billion with many more to come. Including 2013-14, Labor left the Government with future deficits of $123 billion over the forward estimates to 30 June 2017.
If no policy action was taken to repair the budget position the Government inherited, gross debt would have spiralled to $667 billion over the medium term and continued to grow. It is the equivalent of $25,000 for every Australian. This is Labor’s legacy of debt for all Australians.
In the 2013-14 Budget, Labor formally gave up on their farce of ‘delivering a budget surplus in 2012-13’. At that time they wrote down receipts by $17 billion for the 2013-14 financial year alone, and more than $60 billion over the forward estimates.
On the eve of the 2013 Federal Election, then Treasurer Chris Bowen had to go even further in his 2013 Economic Statement, by writing down receipts a further $7.8 billion for 2013-14 and over $33 billion across the then forward estimates.
The Government inherited a shambles of a Budget, a weakening economy and rising unemployment. Off the back of a weaker economy, receipts had to be written down further to a more accurate number in the 2013-14 MYEFO, and have since broadly stabilised.
The Government had to take immediate action to address a number of serious unresolved issues inherited from Labor. This includes:
- Injecting $8.8 billion to restore the Reserve Bank of Australia’s capital buffer after Labor ripped out $5.2 billion in dividends in 2009-10.
- Providing $571 million in 2013-14, and $2 billion over the forward estimates, to fix Labor’s funding shortfall for offshore processing of illegal maritime arrivals.
- Funding public service agencies to meet the cost of Labor’s unfunded redundancies arising from their hidden job cuts.
- Clearing 96 announced but unlegislated tax and superannuation measures that included measures announced to boost the budget bottom line, even though these measures could never be delivered or would damage the economy.
Labor left Australia with no plan to fund the future and address their unsustainable spending trajectory over the medium term.
The Government is implementing an economic action strategy to repair the Budget and strengthen our nation’s finances.
We are making spending sustainable, delivering record infrastructure investment, creating new jobs and bringing the Budget back to surplus over the medium term.
The Government has been taking responsible and methodical action to clean up Labor’s debt and deficit disaster, and get the Budget back under control.
The Final Budget Outcome for the 2013-14 financial year is located on the Budget website.